eCommerce & Payment

Lagging Other Scandinavian Countries but Steadily Catching Up

According to Euromonitor International, the internet penetration in Finland was 93.7 percent in 2016. The precentage of households with access to internet was 90.3 percent. These were both an increase from the previous years. There has been a steady increase in internet subscribers, internet users, and house hold accessibility to broadband internet. Finns were estimated to have spent approximately $5.09 billion online on retail goods from Finland and abroad. The two largest incentives for Finns to shop online are the greater variety of goods and lower prices. Finns spend the most money on home technology and clothing purchases. Electronics are popular products to be bought online. Finns rely heavily on foreign retailers for online purchases.

In 2015, it was estimated that an average of $2,408 was spent from each individual shopping online in Finland. 78 percent of Finns were shopping online. The total sale of both online goods and services was $7.9 billion and estimated to be $8.8 billion in 2016. There is still room for extensive growth for eCommerce in Finland. Last year, the consumer good and alcohol orders made in Finland constituted about 0.4 percent of the overall turnover of grocery trade subject to VAT.

On 1 January 2015, a reform of the Finnish regulation on information society was put into effect. The Information Society Code sets regulations on e-privacy, consumer protection, communications networks, and data security. It aims to promote consumer protection, data security, simplified procedures, and equal opportunities for service providers in the market.

Domestic eCommerce (B2C)

In 2016, Finns spent the most money on home technology and clothing purchases. Most of the home technology was purchased from Finland, other than mobile phones and related accessories. In addition to home technology, gardening products are primarily purchased from domestic online shops. While women’s clothing is mostly purchased abroad, men’s and children’s clothing are still purchased from Finland. Price and range are important, which is why many Finns shop from foreign retailers instead of domestically.

Cross-Border eCommerce

Finland is very dependent on foreign players in eCommerce. Almost 50 percent of online shoppers have made purchases abroad. There is a large eCommerce market in Finland. In 2016, the top 3 product categories purchased from international retailers were clothing and footwear, home electronics, and media. 34 percent of clothing and footwear purchased online were from international retailers. Approximately $3.5 billion was spent on online purchases with 38 percent of purchases coming from abroad.

From a Postnord survey, the five most popular countries from which to buy are Germany, China, United Kingdom, Sweden and the US. Foreign online shops are used, in particular, to buy women's clothing and accessories, more than half of which now come from outside the borders of Finland. Finland’s eCommerce market has catching up to do. They consistently shop online less than their neighbors and lag behind in eCommerce.

B2B eCommerce

B2B eCommerce is an attractive market in Finland because it is quickly growing. B2B companies in Finland have fallen behind B2C companies in active social media engagement. Customers’ experience has become an important factor in B2B ecommerce sites along with omni-channel management and exploiting customers’ purchasing behavior. Customers are now more concerned about privacy, security, and trust issues related to online stores in the field of B2B eCommerce.

eCommerce Services

In 2016, Finns spent a total of $3.9 billion on B2C services purchased online. The most popular services were travel tickets, package tours, and accommodations. 40 percent of the total services purchased online were travel tickets (airline, ship, train, and bus). Only 2 percent order meals online, a more common practice in the metropolitan area.

eCommerce Intellectual Property Rights

The U.S. International Trade Administration states that enforcing intellectual property rights (IPR) violations on immaterial products has been less of a priority for police and customs in the Nordic countries, and the laws are currently being rewritten to reflect the digital reality. Like all markets of the world, manufacturers need to make sure their intellectual property is protected, whether they produce a physical product or something more immaterial   such as software, code, art, or music.  IPR considerations are regulated nationally with the official patent offices.

Mobile eCommerce

Only 12 percent of Finns have reported using a cell phone to purchase products and 15 percent have reported using a tablet. Mobile use for online purchasing has been increasing due to a growing trust in mobile payments. There is a large opportunity for growth in mobile eCommerce and mobile payments. Consumers under the age of 25 especially use mobile devices for purchases.

Online Payment

The four most popular eCommerce payment methods are debit or credit cards, direct payment via bank, invoice, and PayPal or similar online payment options. The Finns find it important to offer a range of different payment options but especially the option to use a debit/credit card or direct payment via bank. They are extremely concerned about the safety of their card information.

Other Payment Methods

Online bank transfers dominate eCommerce purchases, accounting for nearly half of all transactions (48.1%).

´┐╝´┐╝Invoice payments are also popular, accounting for 17.7% of transactions but mobile accounts for just 1%. According to the World Bank, mobile phone subscriptions have grown and are now at 173 per 100 people, suggesting mobile is an area for focus.

Payment Regulation

In line with Nordic regional trends, Finland has made significant progress towards becoming a cashless society, as several companies and government offices in Finland have abandoned the use of cash. The National Land Survey of Finland stopped accepting cash in two customer service branches in North Karelia during January–April 2013; the primary reason for this was to save costs, as cash deposits needed to be sent to the bank once or twice daily. As the trial was successful, the National Land Survey of Finland stopped accepting cash in all branches in Central and Southern Finland, and Pirkanmaa-Satakunta. Similarly, Aurinkomatkat, one of Finland's largest travel agencies, has terminated cash payments in its service offices.

Local Entitites

To capitalize on the fast-growing mobile payments (m-payments) market, an increasing number of retailers are allowing customers to make payments by mobile phone. OP-Pohjola Group launched a mobile wallet app, Pivo, in March 2015. The wallet uses Host Card Emulation (HCE) technology to emulate a card on an NFC-enabled device to make contactless payments. This service is available for holders of Visa Debit and Visa Electron cards. Since May 2014, the Finnish hamburger chain Hesburger has allowed customers to make payments and redeem reward points by using the Seqr mobile app, which was developed by the Swedish company Seamless.

Most Popular Social Network:

Facebook (2.79M)

Most Popular Payment Method:

Bank Payments (48%)

eCommerce Volume:

$8.8 billion

Largest eCommerce Website:

Tori.fi